Delphi Gets Court OK on Retirement Plan

AP ^ | 4/7/6 | PAULETTE CHU

[SmithL]

Auto parts maker Delphi Corp. is free to move ahead on its plan to offer thousands of hourly employees the chance to retire, a bankruptcy judge ruled Friday, marking a key milestone in the company's effort to tame staffing levels amid falling production.

The ruling allows Delphi, one of the world's largest suppliers of auto parts, to pay as many as 13,000 hourly employees to retire. Based in Troy, Mich., Delphi filed for bankruptcy protection in October and is trying to shed what it says are increasingly unsustainable labor agreements that have left it overstaffed and saddled with costly benefit programs.

Judge Robert Drain, of the U.S. Bankruptcy Court in Manhattan, on Friday approved Delphi's plan to offer eligible employees a $35,000 lump sum payment in exchange for their retirement. The payments will actually be funded by former parent General Motors Corp., which agreed to do so as part of a broader labor deal.

Delphi, General Motors and their largest union, the United Auto Workers, announced that deal in March. Under the agreement, some 113,000 GM workers could be eligible for early-retirement incentives or buyouts of between $35,000 and $140,000, depending on seniority and whether they want to keep health care and other benefits.

[grantgarvey]

GM seems like a bad company to work for.

[jdm]

'cuse me while I jump off this bridge.

[Little Bill]

They bought it on themselves, sow the wind reap the storm.

[truth_seeker]

If I was a shareholder, my position would be: oust the entire board of directors, and oust all top management.

To continue paying big bucks to people that kill the Camaro line with no replacement, that name cars "Lucerne," and that move at the speed of glaciers is stupid.

[CoRev]

The Am auto industry has had a sweet heart contract deal since @ 1968. That contract guarantees them 85-90% salary when laid off. Consequently plants have been too costly to close because of having to pay employees. What has happened then is there is @ 10% of the auto work force on VOLUNTARY lay off. Some for as long as a year. My uncle is one of them. Blaming Mgmt is only a small part of the problem. The unions have caused a large part of the problem & they know it.

[truth_seeker]

"Blaming Mgmt is only a small part of the problem. The unions have caused a large part of the problem & they know it."

What do the unions have to do with naming the car "Lucerne?"

Why can all the other auto companies deal with their unique labor situations, except GM and Ford?

Bottom line for me: GM has been badly managed for a long time. Too many mistakes.

Yes, caving to labor is among the mistakes, but is only one.

[CoRev]

You asked: "Why can all the other auto companies deal with their unique labor situations, except GM and Ford?" ass Daimler Chrysler.

The OTHER auto companies are mostly new entities, without the HUGE negotiated retirement and legacy health care tail, and mostly not unionized.

So how does it compute? Newer company pays for X-Z workers with reasonable health care to build the car. No retirement or legacy health care payments. Legacy auto companies pay the same X-Z workers to build the car with bloated health care benefits plus they pay wages and health care for an @10% laid off employees. Additionally they pay for the bloated health care and retirement benefits of an additional
2(x-z) retired workers.

Bottom line, legacy company overhead is much higher, and when they try to negotiate more competitive wages and benefits get struck.

As for the Lucerne? Why did anybody name a car the Edsel? NO! I am not in MI or in any way connected to the auto industry.